Washington, D.C. September 10, 2024 – Today’s release of the U.S. Census Bureau’s report on poverty and income shows that a strong economy matters for workers and families – yet far more is needed to reduce poverty. Income rose at all levels, including for the lowest-paid workers, and median household incomes increased 4 percent from 2022, the most significant increase in household income since 2019. These improvements contributed to a small decrease in the official poverty rate from 11.5 percent in 2022 to 11.1 percent in 2023.

Yet poverty overall, and particularly for children, continues to be stuck at far too high a level. According to the 2023 Supplemental Poverty Measure, many U.S. children continue to live in poverty: the rate climbed slightly from 2022 to a level of 13.7 percent, twice as high as in 2021 when the fully refundable child tax credit and other public programs cut child poverty to a historic low of 5.2 percent.

“This year’s U.S. Census Bureau report serves as a reminder for our nation to make the critical policy choices needed to address poverty, especially child poverty. We know what’s effective: policies to make the economy work for low-wage workers and policies to invest in crucial public supports such as the refundable child tax credit, health care, and nutrition supports – a strong safety net,” said Olivia Golden, interim executive director of CLASP. “These policies are also crucial to addressing the persistent and damaging effects of racism on children and families. The strong policies in the COVID response legislation were designed to reach Black families, Latino families, and families with the fewest resources – and, after initial gaps, children in immigrant families who make up a very large share of U.S. children. As a result, these policies cut child poverty in half across the board.”

Today’s report showed that the overall poverty rate in 2023 of 12.9 percent was roughly the same as in 2022 when poverty stood at 12.4 percent. In addition to the increase in overall child poverty rates, racial and ethnic disparities in child poverty also increased, with 20.3 percent of Black children and 22 percent of Hispanic children experiencing poverty compared to just 7.2 percent of white children. These figures reflect the Supplemental Poverty Measure, which looks at the resources that people have available after taking into account taxes, transfers, and work expenses, and uses an annually adjusted threshold based on the cost of a package of necessities.

The slight decrease in overall poverty reflected in the Official Poverty Measure, which considers only cash income, was driven by the strong economy. This was also seen in the overall increases in cash income for all workers, even those with very low incomes. This reflects tight labor markets that are good for workers who are paid low wages. Inflation has gone down significantly from 7.7 percent in 2022 to 3.9 percent in 2023, creating a path for real income growth in 2023. However, persistent racial and ethnic disparities remain in real median household income, driven by historical and current structural racism in education, housing, and hiring resulting in unequal access to good jobs.

The Census report also found that the share of people lacking health insurance throughout 2023 held steady at 8 percent. Policy matters to this result as well. Two different policies created during the pandemic contributed to a reduction in people lacking health insurance over the past several years. We are likely not yet seeing the full effects of the ending of protections for Medicaid members and other health care expansions provided during the COVID pandemic that served as a safety net for people who lost jobs or faced other economic and coverage disruptions. During the pandemic, states were not allowed to disenroll people from Medicaid. Since this protection ended, more than 12 million people have lost Medicaid coverage. In addition, those purchasing insurance through the Affordable Care Act’s Marketplace have had significantly more affordable options due to increased tax credits provided during the pandemic. But those tax credits are set to expire at the end of 2025 unless Congress acts.